Lisa France MP Assistant Minister for Natural Resources and …€¦ ·  · 2012-11-29Assistant Minister for Natural Resources and Mines Member for Pumicestone Global Seminar on

By

Lisa France MP

Assistant Minister for Natural Resources and Mines

Member for Pumicestone

Global Seminar on the Role of Parliaments and Extractive industries

Hosted by the Commonwealth Parliamentary Association

VIENNA, AUSTRIA 28 - 31 OCTOBER 2012

Tabled

Incorporated, by leave

Clerk at the Table:

1.0 Introduction .................................................................................................... 2

2.0 Travel approval ............................................................................................... 3

3.0 Requirement to report ................................................................................... 3

4.0 Official itinerary ............................................................................................. 4

5.0 Official program .............................................................................................. S

6.0 Parliamentary participants ............................................................................ 7

7.0 Report on the role of Parliaments and Extractive Industries .................. 8

7.1 Enabling Parliamentary Engagement ............................................ 9

7.2 Scrutinising Extractive Industry Agreements ............................... 9

7.3 Parliamentary Strengthening ......................................................... 10

7.4 Overseeing the Beneficial Use of Revenues ............................... 10

Attachment A ................................................................................................................... 12

Many countries face challenges to realize the full potential of their non-renewable natural resources

and avoid the pitfalls that have plagued resource-rich countries in the past. This is particularly the

case for low-income countries, which have huge development needs but often weak institutions.

Economic challenges include optimal resource taxation, fiscal policy design, and exchange rate

management, managing volatility, and promoting economic diversification. In practice, oil, gas and

mineral resources have had an adverse effect on the economies of several resource-rich nations.

Instead of contributing to poverty alleviation and economic growth, resource revenues often lead to

large-scale corruption, underdevelopment, and in some cases have fueled conflict and war. In order

for natural resources to be used effectively and to contribute positively to development, more

accountable and transparent mechanisms must be adopted from the beginning of the mineral

exploration stage and supported by a wide range of stakeholders such as governments, multinational

corporations, the media, political parties, civil society organizations (CSOs) and, most importantly,

legislatures.

We have witnessed increasing demand among Members of Parliament (MPs) and parliamentary

staff to receive capacity support to engage with extractive sector issues.

The seminar:

(a) Enhanced awareness of prevailing issues by sharing recent research and experience related to the

natural resources sector;

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(b) Identified good practice with respect to parliamentary engagement with the extractives sector,

emphasizing how parliaments can perform their primary functions (representative, legislative, and

oversight) in order to improve governance of the natural resources sector; and

(c) Shared knowledge and experience around strategies parliaments and development agencies can

employ to build sustainable parliamentary capacity.

The Queensland Branch of the CPA was represented by Lisa France MP, Assistant Ministerfor

Natural Resources and Mines and Member for Pumicestone.

Section 3.7 ofthe Commonwealth Parliamentary Association (Queensland Branch Membership, CPA

Activities and Administrative guidelines (the Guidelines) states:

"From time to time the CPA will invite a representative from the Queensland Branch to attend a

special conference, seminar or activity. In most cases the CPA provides funding for the

representatives attendance by reimbursing the branch.

On receipt of such an invitation, the Honorary Secretary shall take all steps to identify a suitable

representative by advising the respective parliamentary party secretaries.

The Honorary Secretary shall strive to ensure that the invitation is met and where possible that

invitations are dealt with on a rotational basis: one Government member one invitation and one

non-Government member the next invitation.

Funds can be expended by the Queensland Branch in accordance with the invitation and

reimbursement sought from the CPA. Where the CPA is not reimbursing costs, approval of the

Speaker to accept the invitation is required."

In accordance with those guidelines, Mrs Lisa France MP, Member for Pumicestone, was

nominated to attend the Global Seminar on the Role of Parliaments and Extractive Industries

being held in Vienna, Austria on 29-31 October 2012.

In accordance with Section 3.0 of the Guidelines, the Honourable the Premier was notified of the

approval of my official visit to Vienna by the Honorary Secretary (the Clerk of the Parliament) in

writing.

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The hosts of the conference met the cost of: the cheapest economy-class return air travel to Vienna

by the most economic route, bed and breakfast accommodation at a designated hotel near the

Institute and lunches from the evening of 28 October to the morning of 1 November.

Other expenses were the responsibility of each participant or his or her Branch. The Speaker, as

President of the Branch under the Guidelines approved any costs beyond that provided by the hosts.

Including:

- an upgrade to business class (from paid for economy)

-an incidental allowance to defray costs of dinners/incidentals

-travel insurance

-accommodation that may be required either side of the seminar to fit in with flights

This table demonstrates the costs met by the CPA:

Airfares (net of CPA contribution) $ 5,482.80

Visa/Travel Insurance $ 201.00

Conference Fee Nil

Accommodation (excluding CPA funded conference hotel costs) $ 687.64

Meals/Incidentals Allowance* met by the Qld Government $ 777.00

Total $ 6,371.44

Section 3.10 of the Guidelines requires me to report to the Parliament in respect of any overseas

travel. The report will include the following details:

• the CPA activity undertaken

• benefits obtained from the overseas travel

• the final itinerary or program, including countries visited, dates oftravel, and sufficient detail

to substantiate the official nature of the journey

• details of any personal component of the travel.

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Tuesday 8.45pm Depart Brisbane for Vienna

23/10/12 Flight number EK435

Wednesday 1.45pm Arrive Vienna

24/10/12 3.00pm Transfer to accommodation

Thursday Personal day

25/10/12 Friday Personal day 26/10/12 Saturday Personal day 27/10/12 Sunday 5.00pm Evening welcome reception for CPA conference 28/10/12 Monday 9.00am to 5.30pm CPA Seminar 29/10/11 Tuesday 9.00am to 5.30pm CPA Seminar 30/10/12 Wednesday 9.00am to 5.30pm CPA Seminar 31/10/12

10.05pm Depart Vienna for Brisbane Flight number EK 126

Thursday In transit

1/11/12 Friday 6.40am Arrive in Brisbane

2/11/12 8.00am Travel to Bribie Island to electorate office

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Session Description Resource Team

1. Opening remarks General introduction and brief seminar • Vasuki Shastry, IMF

overview and context. • Mitch O'Brien, WBI

• Andrew lmlach,

CPA

2. The Commodities General Overview of major trends in the • Rabah Arezki, IMF

Market, recent boom, commodities markets recently, and why this • Mitch O'Brien, WBI

impacts and trends matters for MPs

3. Tax Policy and Revenue The primary benefit for a country in deciding Moderator:

to extract its natural resources is increased Head of

revenue. This session explores such topics as parliamentary

delegation [TBC] II Tax Regulation, Resource People:

• Royalties and Extractive contracts, • Philip Daniel, IMF

• The utilization and monitoring of various •RWI

Revenue Streams,

• Which tax regime best balances the

benefits from natural resources for the

country and the interests of the

extractive companies, and

• Institutional reforms parliaments can

adopt in order to better assess estimates

and revenue.

5. Macro-Economic Policy There are several issues that should be Moderator: Head of

Choices considered prior to deciding whether it is in parliamentary

the national interest to extract. This session delegation [TBC]

will explore: Resource People:

• How to become involved in and what to • CPA Branch

require from the resource exploration • Todd Mattina, IMF

process; • Dan Ghura, IMF

• How to deal with the volatility and

exhaustibility of resource revenue,

including how to contain expectations;

• How fast can spending be scaled up

without compromising economic

stability, economic diversification, and

the efficiency of government spending,

and

• What role can sovereign wealth funds

play in the management of resource

revenue

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6. Diversification, options • How resource-rich countries can •Todd Mattina, IMF

and best practices promote diversification of their • Dan Ghura, IMF

economies so as to generate equitable •RWI

growth and employment creation in the •CPA

non-resource sector and, in the resource

sector, beyond simple extraction and

transport.

Queensland Mrs Lisa France, MP, Assistant Minister for Natural Resources and Mines

Western Australia Hon. Norman Frederick Moore, MLC, Minister for Mines and Petroleum; Fisheries; Electoral Affairs

Bangladesh Mr Anisullslam Mondal, MP

Alberta Ms Donna Kennedy-Glans, MLA, Chairperson ofthe Standing Committee on Resource Stewardship

Saskatchewan Mr Rob Norris, MLA, Legislative Secretary to the Premier

Ghana Hon. Albert Kan-Dapaah, MP, Chairman of the Public Accounts Committee

India Shri Pinaki Misra, MP Shri Dhananjay Singh, MP

Nigeria Hon. Sani Ibrahim Ruwan Doruwa, MHR

Trinidad and Tobago Hon. Dr Roodal Moonilal, MP, Minister of Housing, Lands and Marine Resource and Leader of the House

Uganda Hon. Ssemujju Ibrahim Nganda, MP

Zambia Mr Ambrose L. Lufuma, MP

See Attachment A for contact details of each of the participants

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From left to right, top to bottom (standing): Norman Moore (Australia), Roodal Moonilal (Trinidad and Tobago), Dan Ghura (IMF), Dhananjay Singh {India), Albert l<an Dapaah (Ghana), Mitch O'Brien (WBI), Ambrose Lufuma (Zambia), Sasha Prostmikin (JVI),I<arina Manasseh (IMF); Abdulkarim Mohammed (Ghana, parliamentary Centre), Femke Brouwer (RWI) Philip Daniel (IMF), Vasuki Shastry {IMF), Andrew lmlach (CPA), Todd Mattina {IMF).

Sitting (from left to right: Rob Norris (canada, Anisul Mondol (Bangladesh), Ssemujju Ngana (Uganda), Lisa France (Australia), Donna Kennedy Glans (Canada), Pinaki Misra (India).

Proposals to strengthen parliamentary oversight of extractive industries so they are developed in a

transparent and accountable way which benefits their societies and the wider world have been

identified by a select group of Parliamentarians from 11 Commonwealth jurisdictions with extractive

industries. The proposals came out of a seminar from 29 to 31 October 2012 at the Joint Vienna

Institute in Vienna, Austria, that brought Commonwealth Parliamentarians together with

representatives from the International Monetary Fund, the World Bank Institute, the Revenue Watch

Institute and the Parliamentary Centre (Ghana).

The proposals offer Parliaments, parliamentary committees and individual Parliamentarians

guidance on specific processes they and multi-stakeholder groups could use to ensure that mineral

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and petroleum resources are converted into social and financial assets for the benefit ofthe people

of the jurisdictions which own them. They will help governments to provide a stable environment

and efficient, effective and robust policy, legislative, administrative and regulatory frameworks for

investment in exploration, development and marketing of these resources. The proposals are built

on the fundamental principle that all stakeholders will have confidence in the development process

if it is managed in a fully transparent way throughout the life of the projects.

It was recognized that mineral and petroleum resource development is a highly complex, technical

and volatile field. The resources themselves are non-renewable and consequently finite.

Transparency and accountability are therefore essential to re-assure all stakeholders that

expectations are reasonable, developments are fair and benefits are spread equitably throughout

society. The group therefore encourages all Parliaments and Parliamentarians to support efforts to

enhance the transparency of the sector, including projects such as the Extractive Industries

Transparency Initiative and contract monitoring.

The group stressed that the provision of processes to ensure transparency and proper scrutiny is

only the starting point. Governments, Parliaments and other stakeholders must have the capacity

and the will to use the processes fully and vigorously.

The following are some ofthe main proposals that emerged from the discussion:

1. Parliament must approve clear and well-considered policies on extractive industries which are part of a comprehensive development plan.

2. Parliament must scrutinize government institutions, administrative processes and regulatory agencies involved in extractive industry development.

3. Parliament must have access to the contracts, licences and other agreements between the

government and resource developers and investors, including provisions on changes in ownership of projects and the arbitration of disputes.

4. Parliaments and parliamentary committees must have clearly defined roles in the approval

of contracts, the oversight of regulatory agencies and the scrutinizing of income and

expenditure of revenue emanating from resource development.

5. Provided the selected fiscal process or processes are run efficiently and transparently, revenue from extractive industries can be obtained equally effectively through the sale or

auction of contracts including production-sharing regimes, through taxes and royalties

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including the licencing of exploration and exploitation areas and through direct state ownership either as a majority or minority shareholder.

6. A combination of revenue processes can be beneficial if there is a need to obtain revenue early in the development of extractive industries.

7. Stabilization clauses seeking to shield companies from future political and legislated changes are inappropriate and generally ineffective.

8. Commercial confidentiality should be kept to a minimum and should be time-constrained.

9. Parliaments should be provided with the information and the resources necessary for effective oversight, including where possible the provision of expert technical advice.

10. Parliaments, parliamentary committees and individual Parliamentarians should work with civil society groups, both local and international, to obtain information and expert advice on the operations of resource projects, the effectiveness of their regulation and the monitoring of revenues.

11. Parliament should consider supporting or encouraging the creation of multi-stakeholder groups, possibly including some Parliamentarians, to give civil society a formal role in monitoring extractive industries.

12. Parliament must maintain the highest standards of propriety among its Members through strict adherence to codes of conduct, codes of ethics and asset disclosure rules so its performance in the oversight of extractive industries is beyond reproach.

13. Parliament must make full and effective use of all its oversight practices and procedures to monitor the performance of extractive industries, including: public accounts and audit reviews, approval ofthe budget, questions to Ministers, departmentally related committee reviews, requests for the production by ministries of persons and papers, special parliamentary committee inquiries and debates on policies and motions.

14. Government must report to Parliament fully on its use of the revenues and in-kind benefits, including social development projects, received from extractive industries.

15. Parliamentary budget scrutiny should ensure that public expenditure levels distribute the benefits from extractive industries sustainably over time to avoid excessive short-term spending when revenues are high and excessive borrowing when revenues are low and to retain equitable benefits for future generations.

16. The revenues from resource assets should be used to finance social and infrastructure development, economic diversification and the development of human resources to help reduce future dependence on revenues from extractive industries.

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The Parliamentarians offer these proposals to assist Commonwealth Parliaments and Legislatures,

the Commonwealth Parliamentary Association, the World Bank Institute, the International Monetary

Fund, the Revenue Watch Institute, the Parliamentary Centre and the wider global community to

address the issues around the development of extractive industries. They recognize that the

responses to the issues will vary in each jurisdiction to reflect local circumstances. However, the

Parliamentarians see great advantages in strengthening parliamentary oversight of the development

of publicly owned natural resources and suggest that Parliaments consider the proposals to increase

transparency and public confidence in this sector.

The participating Parliamentarians and organizations extend their thanks to the Joint Vienna Institute

for facilitating the seminar.

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